I absolutely Agree.
Virus writer exploited this: FreeEBook.EPUB.EXE
The Exe is hidden by default, but the psychology say 'EPUB'. <click>

W7 (?not sure if Vista does this) at least treats the filename and extension as 2 separate entities, so you don't have to remember to always include the extension on rename, if you have the extension always visible.

W7 does this as well on a rename. But, it Windows should show the extension. Someone needs to be fired for this decision.